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As Forties Falter, the US Moves In

Dec. 14, 2017

The Forties Pipeline System suffered a major shutdown this week after running at reduced rates since December 6 as a hairline crack in the 450,000 b/d pipeline near Red Moss in Aberdeenshire worsened.  The system transports around 40% of UK North Sea oil production, connecting 85 fields to the British mainland and feeding  Ineo’s  refinery in Grangemouth.  The shutdown is expected to last for several weeks as pipeline operator Ineos stated “no less than two weeks” and will likely push the current Forties loading program into the New Year.  We note that Brent crude prices found immediate ...

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Euro-zone Reaches New Highs

Dec. 12, 2017

Global manufacturing PMI reached its highest level since March 2011 this past month amid increased levels from nearly everywhere.  One of the main drivers behind this growth has been the Euro-zone, which according to preliminary data reached its highest level since April 2000 at 60.1.  While this data is based on preliminary estimates, we tend to believe the bullish trend as official monthly data from October indicates a surge in manufacturing activity.  The manufacturing PMI of the Euro-zone has outpaced that of the US since the beginning of the year as European countries continue to hold the top eight ...

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Pioneiro de Libra Leads the Pack

Dec. 8, 2017

The floating, production, storage and offloading unit (FPSO), Pioneiro de Libra, made headlines in November, kicking of the start of the Libra oilfield, the second to be developed in Brazil’s pre-salt area, with about 50,000 b/d of capacity.  Additional crude supply is expected from the Lula and Campos fields with a 150,000 b/d FPSO and 30,000 b/d smaller project on track to begin in the first quarter of 2018.  These new projects coupled with ramp-ups at the P66 150,000 b/d platform, additional crude production is expected to be 160,000 b ...

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TC2 Runs Up

Nov. 30, 2017

Prior to the Thanksgiving holiday in the US, we expected that TC2 would find some freight rate support in the short-term as we moved into this week with a relatively thin tonnage list.  This expectation has come to fruition over the last two days as TC2 opened to week at WS 125 and has risen to WS 160 as of today.  This 35 WS point run-up is mainly driven by higher gasoline demand in West Africa pulling volumes out of the UKC and thinning the tonnage list in Northern Europe.  With positions tight in the UKC and a relatively healthy ...

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Filling the Gap: Part 3

Nov. 21, 2017

US crude has been making its way to Eastern markets in high volumes this year with official monthly data from the US Energy Information Administration (EIA) indicating an average of 896,000 b/d through August 2017.  In the past, a majority of US crude was piped north into Canada; in fact, from 2010 to 2015 an average of 94% of US crude was exported to Canada.  The removal of the ban on US crude exports at the tail end of 2015 allowed this figure to fall to 61% in 2016 amid higher flows to Northern Europe, the Caribbean, and ...

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